About GENERAL ELECTRIC CO

General Electric Company operates as a high-tech industrial company in Europe, China, Asia, the Americas, the Middle East, and Africa. It operates through four segments: Power, Renewable Energy, Aviation, and Healthcare segments. The Power segment offers gas and steam turbines, full balance of plant, upgrade, and service solutions, as well as data-leveraging software for power generation, industrial, government, and other customers. The Renewables segment provides various solutions for its customers through combining onshore and offshore wind, blade manufacturing, grid solutions, hydro, storage, hybrid renewables, and digital services offerings.

The Aviation segment designs and produces commercial and military aircraft engines, integrated engine components, electric power, and mechanical aircraft systems; and provides aftermarket services. The Healthcare segment provides healthcare technologies to developed and emerging markets in medical imaging, digital solutions, patient monitoring and diagnostics, and drug discovery and performance improvement solutions that are the building blocks of precision health to hospitals and medical facilities. The company also engages in the provision of various financial solutions; and management of run-off insurance operations, which provides life and health insurance and reinsurance products, as well as grid management software. General Electric Company was incorporated in 1892 and is headquartered in Boston, Massachusetts.

GE operates in the Manufacturing | Electrical Equipment | headquartered in Boston, Ohio | approximately 172,000 employees | led by CEO H. Lawrence Culp.

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## Investment Thesis GENERAL ELECTRIC CO (GE) currently ranks **#9** in our coverage universe of 3,571 U.S.-listed equities, with a composite score of **80.2/100**. This places the stock in our **"Strong Buy"** category based on our proprietary six-factor quantitative model. The bull case rests on three pillars: exceptional profitability (Quality score: 85/100), favorable market dynamics (Momentum: 79/100), and reasonable valuation relative to quality (Value: 77/100). Our model, built on 46 peer-reviewed academic studies, identifies these factor combinations as historically predictive of outperformance. The central question for investors: **Is GE's quality premium justified by its growth trajectory, or has the market already priced in perfection?** --- ## Company Overview GENERAL ELECTRIC CO operates in the **Technology** sector and has demonstrated strong revenue growth of 18.5% over the trailing twelve months. The company converts 19.0% of revenue into net income, a healthy margin profile. At $324.9B, GE is one of the largest companies in the world, giving it significant operational scale and access to capital markets on favorable terms. --- ## Our Six-Factor Analysis Our proprietary model evaluates every stock across six factors, each backed by peer-reviewed academic research. Here's how GE scores: ### Quality Score: 85/100 ★★★★★ **What we measure:** Return on equity, return on assets, gross margin, net margin, earnings consistency, and accruals quality. GE generates a return on equity of **45.2%**, exceptional by any standard and indicative of a highly efficient capital structure. Gross margin of **36.8%** reflects competitive industry dynamics. Net margin of **19.0%** is healthy and provides cushion for operational headwinds. **Academic evidence:** Research by Novy-Marx (2013) demonstrates that quality stocks outperform by 4-6% annually over long periods, even after controlling for market beta. --- ### Value Score: 77/100 ★★★★ **What we measure:** P/E, P/B, P/S, EV/EBITDA, and free cash flow yield relative to sector and historical norms. GE trades at **37.33x earnings**, a rich valuation priced for significant future growth. Price-to-book of **17.40x** reflects significant intangible value and growth expectations. **Academic evidence:** Fama and French (1992) established that value stocks (low P/B, P/E) outperform growth stocks by 3-5% annually, though this premium has compressed in recent years. --- ### Momentum Score: 79/100 ★★★★ **What we measure:** 12-month price momentum, revenue growth acceleration, earnings surprise frequency, and relative strength. Revenue growth of **18.5%** shows solid business momentum. Our timing model assigns a score of **57.5710612054922/100** with a **Favorable** signal, suggesting neutral timing. **Academic evidence:** Jegadeesh and Titman (1993) documented that stocks with strong 6-12 month momentum continue to outperform over the subsequent 3-12 months, generating 1%+ monthly alpha. --- ### Investment Score: 32/100 ★★ **What we measure:** Asset growth, capital expenditure intensity, acquisition activity, and capital allocation discipline. An investment score of 32/100 reflects either defensive capital preservation or underinvestment in growth opportunities. **Academic evidence:** Titman, Wei, and Xie (2004) found that companies with high asset growth subsequently underperform, suggesting capital discipline matters. --- ### Stability Score: 83/100 ★★★★★ **What we measure:** Beta, earnings volatility, balance sheet strength, debt levels, and cash flow consistency. Beta of **1.13** indicates market-level volatility. Debt-to-equity of **1.1%** reflects a conservative capital structure with ample financial flexibility. **Academic evidence:** Low-volatility stocks have historically outperformed high-volatility stocks on a risk-adjusted basis—a phenomenon known as the "low-volatility anomaly" (Baker, Bradley, Wurgler 2011). --- ### Short Interest Score: 57/100 ★★★★ **What we measure:** Days to cover, short interest as percentage of float, and short interest trend. Short interest is in normal range. --- ## Economic Moat Assessment Based on our analysis of profitability metrics, competitive positioning, and sustainability of returns, we assess GE's economic moat as follows:

Moat Type	Switching Costs
Moat Width	Narrow
Uncertainty	Low

- Exceptional profitability metrics suggest pricing power - Revenue stability indicates potential switching costs - Capital-light model with high returns suggests efficient scale --- ## Fair Value Estimate We employ a reverse discounted cash flow methodology to estimate fair value, working backward from the current price to determine what growth assumptions are implied. ### Three-Scenario Analysis

Scenario	Implied Fair Value	Upside/Downside	Assumptions
Bear	$130.6B	-59.8%	Assumes 8% 5-year growth, 18x terminal P/E, 12% discount rate
Base	$238.1B	-26.7%	Assumes 12% 5-year growth, 25x terminal P/E, 10% discount rate
Bull	$414.1B	+27.5%	Assumes 18% 5-year growth, 32x terminal P/E, 9% discount rate

### Probability-Weighted Expected Return Assuming 20% bear, 50% base, and 30% bull probability weights: **Expected Return: -17.1%** --- ## Peer Comparison How does GE stack up against sector peers?

Company	BCR Score	P/E	ROE	Net Margin
GE (This Stock)	80.2	37.33	45.2%	19.0%
MSFT	81.2	30.14	35.4%	47.3%
GOOGL	79.8	23.65	29.6%	34.2%
ESE	79.7	18.21	24.1%	76.3%
NVDA	79.5	45.63	1.1%	56.0%
LRCX	79.2	36.00	64.0%	29.8%

GE's score is competitive with sector peers. --- ## Risk Factors Every investment carries risk. Here are the key risks for GE: ### Valuation Risk ⚠️ HIGH At 37.33x earnings, GE is priced for significant future growth. Any deceleration in revenue or margin compression could result in multiple contraction and substantial capital loss. ### Competitive Risk ⚡ MODERATE Technology sector dynamics are characterized by rapid change and potential disruption. Market leadership today does not guarantee leadership tomorrow. ### Execution Risk ⚡ MODERATE The company has demonstrated reasonable operational stability. ### Macro Risk ⚡ MODERATE All equities are subject to macroeconomic conditions including interest rates, inflation, and economic growth. A recession could impact earnings regardless of company-specific quality. --- ## Financial Deep Dive ### Income Statement Analysis **Gross Margin: 36.8%** — Compressed margins suggest competitive industry dynamics. **Operating Margin: 20.4%** — Solid operational performance. **Net Margin: 19.0%** — Healthy bottom-line performance. ### Balance Sheet Analysis **Debt-to-Equity: 1.1%** — Conservative leverage with ample financial flexibility. **Return on Equity: 45.2%** — Exceptional capital efficiency—top decile performance. ### Cash Flow Indicators **Revenue Growth: 18.5%** — Strong top-line expansion indicating market demand. --- ## Investment Decision Framework ### Who Should Buy GE? ✅ **Long-term investors** seeking quality exposure ✅ **Factor investors** targeting quality and momentum ✅ **Portfolio builders** needing Technology sector exposure ### Who Should Avoid GE? ❌ **Deep value investors** seeking bargain prices ❌ **Short-term traders** seeking high volatility ❌ **Risk-averse investors** concerned about valuation risk ### Position Sizing Recommendation Based on our factor profile and risk assessment: | Portfolio Size | Suggested GE Weight | |----------------|---------------------------| | $10,000 | $800 - $1,200 | | $100,000 | $8,000 - $12,000 | | $1,000,000 | $80,000 - $120,000 | --- ## The Bottom Line GENERAL ELECTRIC CO represents **a compelling investment opportunity** based on our six-factor quantitative analysis. The company's quality metrics are exceptional, while its valuation offers attractive entry point. Our fair value analysis suggests **downside risk of 27%** under base-case assumptions, with probability-weighted expected returns of **-17%**. We recommend accumulation, particularly on any pullbacks that improve the risk-reward profile. ---

--- ## Methodology Disclosure This analysis is based on the Blank Capital Research six-factor quantitative model, which evaluates securities across Quality, Value, Momentum, Investment, Stability, and Short Interest factors. Factor weights are derived from 46 peer-reviewed academic studies and calibrated to current market conditions. Our fair value estimates employ reverse discounted cash flow analysis, working backward from market price to implied growth assumptions. This methodology is inherently uncertain and should be considered as one input among many in investment decisions. --- *This report was generated on Monday, February 16, 2026. The analysis reflects data as of that date. Past performance does not guarantee future results. This is not investment advice. Blank Capital Research may hold positions in securities mentioned.*